Nifty 50 (23,151) and Nifty Bank (53,758) cracked 5.3 per cent and 7 per cent respectively last week. The chart and the derivatives data suggest the downtrend may not be over yet. Here is our analysis:

Nifty 50

Nifty futures (March) (23,199), after opening with a gap-down last Monday, attempted a recovery. However, it faced a hurdle at 24,400 and resumed the decline. The contract breached the support at 24,000 and saw a deeper decline. By ending at 23,199 on Friday, it lost 5.5 per cent for the week. 

There are no signs of a bullish trend reversal on the chart yet. While there is a likelihood for Nifty futures to retest 24,400, we expect the contract to see one more fall and extend the ongoing downtrend to 22,700. Subsequent support is at 22,200.

That said, if the contract breaks out of 24,400, it can extend the rally to 24,850. Only a decisive breach of 25,000 can turn the outlook bullish.

Substantiating the bearish view, Nifty futures witnessed considerable short build-up over the past week. As the contract slipped 5.5 per cent, the outstanding open interest of the March contract increased from 157 lakh contracts to nearly 200 lakh contracts.

With respect to options, the Put Call Ratio (PCR) of March and April monthly contracts stood at 1 and 0.90 respectively on Friday. Nevertheless, over the past week, there has been a relatively greater number of call option selling compared to put options in both March and April contracts, showing a bearish inclination. 

Overall, the prevailing downtrend is intact and the bears can drag Nifty futures further before it can establish a sustainable rally. 

Strategy: Sell Nifty futures (March) if it rises to 23,750 for a better risk-reward ratio. Place stop-loss at 24,200. When the contract falls to 23,000 after the trade is initiated, revise the stop-loss to 23,500. Book profits at 22,700. 

Nifty Bank

Nifty Bank futures (March) (53,923), too, began last Monday’s session with a gap-down. After a failed attempt to recover, the contract saw a sharp fall. It broke down below a key support at 55,000 and closed the week at 53,923, losing 7.2 per cent. 

Wrapping up the week near the lowest traded level indicates strong selling pressure on the contract. But note that the price band of 53,500-54,000 is a considerable base, which can aid Nifty Bank futures in turning the direction upwards. However, such an uptick can be short-lived given the overall weakness in the market.

So going ahead, Nifty Bank futures might rally to 55,400 and then see another leg of downtrend. Such a fall can drag the contract below the support at 53,500 and take it to the 51,850-52,000 price region.

In line with the bearish indications, Nifty Bank futures saw fresh short build-up during the last week. While the price dropped by 7.2 per cent, the outstanding open interest of March contract increased from 21.5 lakh contracts to 22.6 lakh contracts. 

Option traders too seem to expect further decline as selling of call options exceeded that of put options in the past week. Traders sell calls when they are bearish.

Considering the prevailing price action and how futures and options data look, the probability for a decline is high. But there could be a corrective rise on the back of the base ahead at 53,500. 

Strategy: Stay out for now and short Nifty Bank futures when it rises to 55,400. Place stop-loss at 56,750. When the contract drops to 53,500 after the position has been initiated, alter the stop-loss to 54,000. Exit at 51,850.

Published on March 14, 2026